Preliminary Paper No 20
TENURE AND ESTATES IN LAND
A discussion paper
The Law Commission welcomes your comments on this paper
and seeks your response to the questions raised.
These should be forwarded to:
The Director, Law Commission, P 0 Box 2590, Wellington
by Friday, 30 October 1992
June 1992
Wellington, New Zealand
The Law Commission is an independent, publicly funded, central advisory body
established by statute to undertake the systematic review, reform and development
of the law of New Zealand. Its aim is to help achieve coherent and accessible
laws that reflect the heritage and aspirations of New Zealand society.
The Commissioners are:
Sir Kenneth Keith KBE - President
The Hon Mr Justice Wallace
Peter Blanchard
The Director of the Law Commission is Alison Quentin-Baxter. The offices of
the Law Commission are at Fletcher Challenge House, 87-91 The Terrace,
Wellington. Postal address: PO Box 2590, Wellington, New Zealand.
Telephone: (04) 4733 453. Facsimile: (04) 4710 959
Use of submissions
The Law Commission's processes are essentially public, and it is subject to the
Official Information Act 1982. Thus copies of submissions made to the
Commission will normally be made available on request, and the Commission may
mention submissions in its reports. Any request for the withholding of
information on the grounds of confidentiality or for any other reason will be
determined in accordance with the Official Information Act.
Preliminary Paper/Law Commission Wellington 1992
ISSN 0113-2245
This preliminary paper may be cited as: NZLC PP20
ii
Table of Contents
page
para
Preface
Introduction
1
1
I
Brief history
5
21
11
Transferability of land
7
33
III
Other legal systems
8
38
IV
Customary laws
10
45
V
United States
11
48
VI
The New Zealand law
12
53
VII
Modern English developments
15
63
VIII Statutory reforms elsewhere
16
67
IX
The Crown's power to take land
17
72
X
The case for change
18
75
XI
The scope of reform
19
81
XII
Maori land
23
95
XIII Issues of abolition
27
115
XIV Objections and responses
27
117
XV
30
137
Conclusion
Appendix A
Draft scheme
33
Appendix B
Glossary
61
Appendix C
Bibliography
65
iii
iv
Preface
This preliminary paper is published in the context of a review by the Law
Commission of the Property Law Act 1952. At the same time the Department of
Justice is reviewing aspects of the Land Transfer Act 1952 because new techology
is proposed for the system of registration. The paper is concerned with certain
vestiges of the feudal system which continue to dominate the theory, if not the
practice, of land law in New Zealand. It advocates their partial abolition and puts
forward for consideration a scheme whereby this could be achieved, preferably at
the same time as the review of the Land Transfer Act is completed. The result,
it is suggested, would be simplification of our land law and the abandonment of
obscure methods of describing how land is owned by New Zealanders.
The paper was written by Mr B J Cameron, a former Deputy Secretary for Justice
and later a Law Commission member. He and the Law Commission have been
much assisted by a consultative committee, the members of which are the Rt Hon
Sir Edward Somers, Chief Judge Edward Durie of the Maori Land Court,
Professor Jock Brookfield of the University of Auckland, Derek Levett of the
Department of Survey and Land Information, and Brian Hayes, the
Registrar-General of Land.
The Law Commission calls for comments on the paper, which it would be grateful
to receive by Friday 30 October 1992.
v
vi
Introduction
1
At the present day no person or group of persons in New Zealand, Maori
or Pakeha, can fully own the land on which they have their home or farm or
factory, or on which their church or marae stands. All land ultimately belongs to
the State as personified by the Crown. To find the reason for this, one must go
back to the feudal England of 900 years ago.
2
The fact that only the Crown can be the absolute owner of land is a basic
concept of English and New Zealand law. It is known as the doctrine of tenure.
The Crown is the ultimate owner of all land, and all land is "held" by the citizen
as tenant under a grant from the Crown. What is popularly thought of as "owning
land" is legally being seized of a freehold estate in fee simple in the land, which
must be derived from a grant (or in England a presumed grant) by the Crown.
3
The only New Zealand exception is land still held under Maori customary
title. The Maori Affairs Act 1953 defines customary land as land which, being
vested in the Crown, is held by Maori or the descendants of Maori under the
customs and usages of the Maori people. It is not clear how much of such land
still exists, but there is certainly very little. Even in that case the Crown has
paramount (or "radical") title.
4
The doctrine has recently been succinctly summarised by Fisher J in Re van
Enckevon (a bankrupt) (1990) 1 NZ Conv C 190,589:
Since the Norman conquest, English land has been governed by the doctrine
of tenure. By that doctrine the Crown is the overlord of all land in the
kingdom. Subjects hold the land as mere tenants under grants emanating
directly or indirectly from that source. Strictly speaking subjects own not
the land itself but merely an "estate" in the land which confers certain rights
to use of the land. (190,593)
This doctrine of tenure is thus of the greatest antiquity. It comes from early
feudal times. Together with the intimately inter-related doctrine of "estates", it
is responsible for a good part of the artificiality of our present land law.
5
The notions of tenure and estates were carried into all parts of the United
States and the Commonwealth or former Commonwealth where English common
law prevailed. They did not exist in colonies acquired by conquest or cession
whose previous law was that of some other European power. Thus they are
unknown in Mauritius, Quebec, South Africa and Sri Lanka. In Mauritius, for
example, the principles of property law are those of the Code Napoleon, the
relevant part of which remains in force. Ownership of land is described without
any reference to tenure or estates.
6
Even in territories acquired from non-European rulers, it is doubtful if the
Crown always became paramount lord of the land as well as sovereign.
2
7
In most of the United States the doctrine of tenure of freehold land appears
not now to exist. It was never part of the law of Louisiana, which was acquired
from France. In many other States tenure has been rejected either by judicial
decision or (more commonly) by their constitution or by statute. This legislation
generally declares simply that all land is allodial.
8
The word allodium and its corresponding adjective allodial are Germanic
in origin - Compact Oxford English Dictionary (2nd ed) - and are defined in
Osborne's Concise Law Dictionary (7th ed) as meaning
land not held of any lord or superior, in which therefore the owner had an
absolute property and not a mere estate.
(And note that the term is now used in the definition of "Crown land" in the
Crown Minerals Act 1991.)
9
In contrast to land, other property in New Zealand is "owned" in the full
sense. The vast majority of legal systems outside the common law have no
notion of tenure, and none have any doctrine of "estates" in land. Allodialland
is the norm.
10 This paper therefore uses the word "allodial" to describe the complete or full
ownership of land as distinct from the holding of an estate in it. It does not use
the term "absolute".
11
In fact, of course, ownership, even if "complete" is rarely if ever absolute.
As the New Zealand jurist Sir John Salmond said in Salmond on Jurisprudence:
Ownership is the right of general use, not that of absolute or unlimited use.
He is the owner of a thing who is entitled to all those uses of it which are
not specially excepted and cut off by the law. No such right as that of
absolute and unlimited use is known to the law. (413)
12
This is certainly true of land, which is a strictly limited resource. In terms
of orthodox legal analysis, ownership includes the right to:
•
possess the property;
•
exclude others from the property;
•
use and enjoy the property;
•
the fruits of the property, including any income from it;
•
dispose of the property, whether during the owner's lifetime or under
his or her will.
13
The nature of a society and prevailing ideas of the public interest, and also
contracts made by the owner, may impose limits on some or all of these. So in
New Zealand the right to sell land to overseas residents is limited by the Land
3
Settlement and Land Acquisition Act 1952. The right to leave property by will
to strangers, excluding spouse and children is qualified by the Family Protection
Act 1955. Likewise the right to use one's land may be regulated both by
legislation (eg, zoning restrictions, water rights) and by private covenants, which
may originate in a contract but bind subsequent owners as well. A lessor yields
the right to possess the property for the term of the lease. Many other examples
could be given.
14 However, limitations of this kind on land ownership have no relation to the
doctrines of tenure or estates in land. In modem times (indeed since the 17th
century) these doctrines have no functional element of public interest. Limitations
on ownership do not necessarily spring from them and they have not been used
historically to justify the control of land rights.!
15
Initially in England, land was granted in return for feudal services of one
kind or another. The gradual disappearance of these services, largely completed
by 1660, deprived the doctrine of tenure of almost all practical significance in
relation to freehold land. In New Zealand, services have never been attached to
the grant of freehold land by the Crown.
16 It is important however to distinguish between "freehold" and "leasehold",
the two principal forms of land tenure in New Zealand. A lessee "holds" his or
her land by grant from the lessor, or in the case of a sublessee, from the superior
lessee. A lease gives possession of land for a term of years in return for certain
obligations set out in the lease, principally the payment of rent. In relation to
leasehold therefore the notion of tenure, while perhaps unnecessary, does have a
real meaning.
17
In practice the doctrine that all land is held from the Crown, which has the
ultimate title, has little disadvantage except to make land law more artificial,
elaborate and inaccessible to the public than it needs to be. People generally do
not perceive any restrictions on their "ownership" of land. It does not increase
or affect the power of the State to take land.
18
Nonetheless, the doctrine of tenure from the Crown seems to have little
basis in logic, convenience or social principle in New Zealand today. The
question is whether to do away with this remnant of feudalism.
19
In the Law Commission's opinion, there is a good case in principle for
reforming the law as to tenure of land and estates in land. This case rests on the
desirability of making the law more straightforward and rational. Further, and
most importantly, we believe that this could be done simply and without
endangering any existing rights. Nor would it in any way limit the ability of the
1
See however the submission of the Taupo County Council dated 5 Iune 1987 to the Select
Committee on the Maori Affairs Bill:
... land title is held at the pleasure of the King or nowadays the Crown. Within that con~t
lies the authority to take land where necessary and subject to careful scrutiny for public
purposes.
(The Commission does not accept that this statement is correct - see paras 72-74, 131.)
4
State (as personified by the Crown) to regulate and limit the use of land and other
resources in the public interest. And it is not necessary for the Crown to have the
ultimate title to land in order to carry out its obligations under the Treaty of
Waitangi.
20 We include in this paper, as Appendix A, a draft scheme. In essence, it
converts what are now estates in fee simple into allodial ownership, and substitutes
for the terminology of other "estates" (but not the substance of the law) the
terminology of "interests in land". At the same time it makes a number of minor
improvements and removes a number of obscurities in the present law.
5
Brief history
21
The point of origin of New Zealand's present land law is the Norman
conquest of England in the altogether memorable year 1066. At that time the
political and social structure of most of Western Europe was feudalism, described
thus by the legal historian Maitland:
A state of society in which the main social bond is the relation between lord
and man, a relation implying on the lord's part protection and defence; on
the man's part protection, service and reverence, the service including
service in arms. This personal relation is inseparably involved in a
proprietary relation, the tenure of land - the man holds of the lord, the
man's service is a burden on the land, the lord has important rights in the
land, and (we may say) the full ownership of the land is split up between
man and lord. (The Constitutional History of England, 143)
22
Historians have disputed how far Anglo-Saxon England before 1066 can be
characterised as feudal. In any event however it seems that at that time the
doctrine of tenure, at least in a developed form, did not exist.
... in the tenth and eleventh centuries the Saxon landholder was free both
from customary rules ... and from the manifold restrictions . .. that were
the essence of feudal dominium. The Saxon's right was, in short, not
tenure but property. (Joliffe, The Constitutional History of Medieval
England, 74)
23
JoIiffe adds that the Norman scribes imported the continental term alod
(whence allodial) to describe the Anglo-Saxon bookland in distinction from the
Normanfeudum.
24 In a feudal system the modem distinction between sovereignty and the
ownership of land was tenuous. William I asserted complete overlordship of all
land in England by right of conquest. Much of that land he granted to his
followers; some Anglo-Saxon nobles had their land re-granted to them but strictly
as vassals of the King and not in their own right. In Joliffe's metaphor, the bond
of homage was riveted into the land by the material interest of tenure (Joliffe,
136).
25
Consistently with the essence of feudalism these grants were conditional
upon the performance of services, in particular the furnishing of military
resources. This became known as tenure by knight's service. However a great
variety of tenures came to exist - spiritual and lay, free and unfree. They carried
6
different conditions and different incidents. The interest of a tenant in the land
held was called a feud or fee.
26
A tenant in chief (a person who held land directly from the King) could and
normally did subgrant (subinfeudate) all or part of it to others, again customarily
in return for services. The subgrantor in turn could subinfeudate and in theory
there was no limit to the process. By the statute Quia Emptores (1289-1290) the
ability to subinfeudate in fee simple (ie, to grant a fee simple out of a fee simple)
was effectively abolished for subordinate tenants. The abolition was extended to
tenants in chief in 1327.2
27
During the course of the Middle Ages most of the services that had to be
performed by the tenant were commuted to money payments. As these were fixed
in amount their burden became less as the value of money fell, and they gradually
ceased to be made.
28
The principal residual free tenure was "socage", and it became the ordinary
form under which land was held in most parts of England. By the Tenures
Abolition Act 1660 most other tenures were abolished. Virtually all free
("freehold") tenure was henceforth socage. Much land in England continued to
be held in the non-freehold tenure known as "copyhold", this being finally done
away with in 1925.
29
Free and common socage is the only form of freehold tenure that has existed
in New Zealand and other British settled colonies. It is thus synonymous with
freehold.
30
Together with tenure there grew up the concept of estates in land. The
second is historically and logically dependent on the first. As is said in
Holdsworth's History of English Law
It is not until doctrines of tenure and possession have been developed by a
strong court that we get the rise of the peculiarly English doctrine of estates
in the land. (Vol 2, 67)
31
Conceptually, the doctrine of estates was an answer to the question: if a
tenant did not own the land itself (for the King had paramount title to all land)
what did the tenant own? What was the nature of the tenant's rights? The early
common law developed the abstraction called an "estate" interposed between the
person entitled to land and the land itself (Lawson, The Rational Strength of
English Law, 87). The most complete form of estate, nowadays tantamount in
practice to ownership, was the estate in fee simple. The other freehold estates that
have descended to modern times were the estate in fee tail and the estate for life. 3
The great non-freehold estate is the estate for a term of years, that is, leasehold.
(The leasehold estate has a special and peculiar history that it is unnecessary to
trace here.)
2
See The Property Law Act 1952 (NZLC PP16 1991) paras 126-128.
3
The life estate includes the lease for life which is also a freehold estate, rather than a
leasehold estate.
7
32
Theoretically the doctrine of tenure does not require a doctrine of estates as
it was developed and still exists. The question might have been answered in other
ways. Scotland for example has a doctrine of tenure but not of estates as it is
known in New Zealand. But without tenure, there would have been no need for
the concept of estates at all. No legal system outside the common law appears to
have a system of estates.
11
Transferability of land
33
Originally also, in the first two centuries after the Norman conquest, estates
in land were not freely transferable. But as mentioned above the tenant in chief
of land (that is, the person holding directly from the King) could in turn grant that
land to another person, a subtenant, and so on, a process known as subinfeudation.
This was abolished for subtenants in fee simple by the statute Quia Emptores
(1289-1290) and for tenants in chief by a further statute in 1327. Henceforth an
estate in fee simple was transferable, but could not be sub granted in fee simple.
The prohibition of subinfeudation had no application to leasehold, which was not
"real property" and was not then recognised as conferring an "estate" at all. (The
sublease is effectively the subinfeudation of the leasehold estate and continues to
be permitted.) Nor did it apply to other estates, such as a life estate.
34
In Ulster, where in common with the rest of Ireland English law had been
imposed, persons granted plantations in the 17th century "settlement" were usually
dispensed from the statute Quia Emptores and could subinfeudate by "fee farm
grants". The effects are said to be still obvious in the extreme complexity of the
"pyramid titles" which created great difficulty in conveying urban land; these were
considered in detail in Repon of Committee on Registration of Title in Nonhern
Ireland (1967) Cmd 512, as noted in Survey of the Land Law of Nonhern Ireland
(1971) (para 48).
35
In Scotland, which although legally a wholly separate country adopted the
doctrine of tenure from England, subinfeudation is even now possible and is still
used as a method of conveyancing. Indeed, restrictions in private instruments on
subinfeudation were prohibited in 1938.
36
Where tenure has been abolished in the United States the statute Quia
Emptores is regarded as not being in force, on the ground that it is superfluous
and irrelevant: Gray, The Rule Against Perpetuities, 22. In New Zealand it would
probably be sufficient simply to repeal that statute. This is because the repeal of
a statute does not revive the previous law (Acts Interpretation Act 1924, s 20(t)
applied to Imperial Acts by s 3(4) of the Imperial Laws Application Act 1988).
With allodial ownership the notion of subinfeudation can have no application, and
the transferability of property does not need legislation to support it (no statute
empowers the transfer of most personal property). However, any problems or
8
doubts can be met by simply enacting that land is transferable, as is proposed in
relation to the Property Law Act: NZLC PP 16, para 131. This may seem to the
layperson so obvious as not to need stating, but, at the very least, it will do no
harm.
On the other hand it would be prudent expressly to prevent infeudation 37
the grant of an estate in fee simple by an allodial owner - as is also proposed by
the Law Commission in relation to the Property Law Act. There can be no
justification for ending the Crown's power to grant estates in land while creating
the same power for other owners.
III
Other legal systems
38
The notion that people can "own" land in the same way and to the same
extent as they own furniture, cars or shares seems ordinary and natural to any
non-lawyer or one who has been brought up under other European-based legal
systems. The common law concepts of tenure and estates are not to be found in
the land law of other Westem legal systems, yet these do not lack flexibility or
sophistication. The following are a few examples only.
39
Roman law. Substantially, the concept of tenure played no part in Roman
law: Buckland and McNair, Roman Law and Common lAw, 65. There were
traces of such a notion prior to Justinian:
The second anomalous figure is that of the person to whom public lands
have been granted. Such grants were theoretically, and to some extent
practically, subject to revocation, and the holders are called possessores.
With these may be grouped the holder of provincial land, the dominium of
which, at least in the Empire, is in the State. Both of these are practically
owners: they have, in addition to the possessory remedies, proprietary
remedies, though the forms of these are not perfectly known. The first class
disappeared in the third century of the Empire when a statute definitely
declared their rights to be ownership, and the second is gone under Justinian
when the distinction between Italic and provincial land was abolished. It
will be noticed in connexion with these lands that they give us almost the
only trace in Roman law of a notion approximating to that of tenure which
has played so great a part in our law and still dominates its terminology.
(64-65)
40
France. French law has no doctrine of estates. Ownership attaches not to
estates of various durations but to land itself. There must always be an owner and
limited rights are simply an encumbrance on that.
9
41
Netherlands. "The reader who is familiar with the common law will look
in vain for a doctrine of estates or a distinction between legal and equitable rights"
- Introduction to Dutch Law for Foreign Lawyers (ed Fokkema), 73.
42 . Scotland. Tenure was introduced in the 11th and 12th centuries following
English post-Norman changes, land being deemed to be held mediately or
immediately of the Crown. However the texts treat it casually and give much more
prominence to possession/ownership issues. Some land - somewhere less than 20
per cent - is not subject to feudal tenure. Although land is held in Scotland
allodially only in exceptional circumstances, udal land, land held by possession
without any written title and free of all burdens of services or periodical payments,
exists in the Orkneys and Shetlands under Udal law: see Walker, Principles of
Scottish Private Law Vol2 (1975) at 1202; McNeil Common Law Aboriginal Tztle
154. (In Smith v Lerwick Harbour Trustees (1903) 5 SC (5th) 680, noted by
McNeil at 154, and by the Scottish Law Commission in Property Law: Abolition
of the Feudal System Discussion Paper 93, July 1991 at 145, the Inner House of
the Court of Session held that consequently the Crown had no radical title to the
foreshore of the Shetland Islands.)
43
In 1969 a White Paper (Cmnd 4099), Land Tenure in Scotland, which
followed a more conservative 1966 report of the Committee on Conveyancing
Legislation and Practice (the Halliday Committee, Cmnd 3118), included these
proposals:
(1)
On an appointed day feudal tenure will be abolished, and existing
vassals who are owners of the dominium utile, ie the present
proprietors of the land, will be declared to own their land in terms of
the new form of absolute ownership.
(2)
From the appointed day the feuing or subfeuing of the land will no
longer be allowed, nor will any other disposal of land or rights in land
subject to any form. of annual payment in perpetuity or
quasi-perpetuity.
(3)
The system of land tenure will in future be based on two forms of
holding:
(a)
a form of absolute ownership; and
(b)
enjoyment of occupation for a term (a lease). (11)
44
The abolition of feudal tenure was supported in a subsequent Green Paper
in 1972, but no action has since been taken. It has again been proposed by the
Scottish Law Commission in its July 1991 Discussion Paper 93 (there is an outline
of the Scottish Law Commission's proposals at 2).
10
IV
Customary laws
45
Despite some intimations to the contrary4 the Crown did not always acquire
title to land as well as sovereignty when it acquired territories from non-European
rulers. It has been said that the Crown's rights are no greater than those of the
local sovereign from whom it acquired the territory unless it proceeds to abrogate
or diminish private property rights: McNeil, Common Law AboriginaiTztie 156,
nl17.
46
However, in many places, either under indigenous systems or under the
influence of English law, the local ruler had ultimate ownership of all land, eg,
Benin (see Amodu Tljani v The Secretary, Southern Nigeria [1921] 2 AC 399) and
Tonga (article 104 of the 1875 Declaration of Rights). In the Federated Malay
States (pre-independence) all land vested in the ruler and was held either in
perpetuity or for a term of years. The British Crown as successor in some of
these places would have inherited this ultimate lordship. But generally it is
irrelevant to talk of fee simple, estates, Crown grants and so on. These are
manifestly unknown to customary title, which long antedated any reception of
English law or "Crown grants". There is thus no tenure in the English sense,
although the philosophy behind allodial land - that land belongs purely to
individuals and not to the community - is often equally alien.
47
The comments of Viscount Haldane in Amodu Tljani are of particular
interest and force in this general context:
As a rule, in the various systems of native jurisprudence throughout the
Empire, there is no such full division between property and possession as
English lawyers are familiar with. A very usual form of native title is that
of a usufructuary right, which is a mere qualification of or burden on the
radical or final title of the Sovereign where that exists. In such cases the
title of the Sovereign is a pure legal estate, to which beneficial rights may
or may not be attached. But this estate is qualified by a right of beneficial
user which may not assume definite forms analogous to estates, or may,
where it has assumed these, have derived them from the intrusion of the
mere analogy of English jurisprudence. ... But the Indian title in Canada
affords by no means the only illustration of the necessity for getting rid of
the assumption that the ownership of land naturally breaks itself up into
estates, conceived as creatures of inherent legal principle. Even where an
estate in fee is definitely recognized as the most comprehensive estate in
land which the law recognizes, it does not follow that outside England it
admits of being broken up. In Scotland a life estate imports no freehold
title, but is simply in contemplation of Scottish law a burden on a right of
full property that cannot be split up. In India much the same principle
4
Eg, Sir Kenneth Roberts-Wray, Commonwealth and Colonial Law (625). This was on the
footing that the Crown's ultimate ownership of land was an inherent incident of sovereignty under
British constitutional law, a so-called "major prerogative" (557-561).
11
applies. The division of the fee into successive and independent incorporeal
rights of property conceived as existing separately from the possession is
unknown. (403) [Emphasis added].
v
United States
48
Originally English property law, and consequently the doctrines of tenure
and estates, were part of the law of the American colonies. Nor did it necessarily
follow that tenure disappeared along with the sovereignty of the British Crown.
The common law continued to be the basic law of the new States, and the owners
of fee simple estates might henceforward have held their land from the State.
Indeed this remains the position in some States, eg, Georgia, South Carolina and
perhaps Pennsylvania.
49
However, tenure has on the face of it been done away with in the great
majority of States either by their constitution, by legislation, or through judicial
decision. Thus in Minnesota for example, s 15 of the 1857 Constitution declared
that all land shall be allodial. The same provision is in s 13 of the New York and
s 14 of the Wisconsin Constitutions, and in that of Arkansas, which goes on to
prohibit "feudal tenures of every description, with their incidents." Tenures were
abolished in Virginia as early as 1779, and by derivation in a number of the North
West Territory States formed within the very large boundaries of post-colonial
Virginia, and in Connecticut in 1793. The ownership of land was declared to be
allodial by statute in Kentucky.
50
The courts in some other States, for example California and Maryland, have
held that tenures do not exist in the State and that all land is allodially owned.
(See Gray, The Rule Against Perpetuities, para 23, for a discussion of tenure in
various States which provides references to each of the constitutions above referred
to.)
51
What all this adds up to is another matter. Kent (4 Commentaries 2) called
it a change without substance. In New York, for example, the section of the
constitution declaring the ownership of land to be allodial was preceded by s 11,
providing that:
The people of this State, in their right of sovereignty, are deemed to possess
the original and ultimate property in and to all lands within the jurisdiction
of the State; and all lands the title to which shall fail from a defect of heirs,
shall revert, or escheat to the people.
One may speculate that one purpose of the legislation was symbolic, to
52
remove the shadow of Royal government. On the practical side it served the
limited end of doing away with vestigial feudal obligations attaching to land,
12
notably the quit-rents that existed in a number of the former colonies and were a
serious source of grievance before the American Revolution. (See William R
Vance "The Quest for Tenure in the United States" (1924) 33 Yale U 248.) The
purpose cannot have been to make substantial reforms of property law. Estates
in fee simple and life estates, along with reversions, vested and contingent
remainders, and the rest of the inherited paraphernalia, continue to be part of
American property law except in Louisiana. But, as in New Zealand, a great
many jurisdictions have abolished estates in fee tail.
VI
The New Zealand law
53
New Zealand is a typical instance of the virtually unquestioned application
of the orthodox doctrines of tenure and estates to settled British colonies. It was
roundly asserted in Veale v Brown (1868) 1 NZCA 152:
The feudal system, long extinct in England itself as a social and political
force, is yet the source of all the doctrines of the English law of real
property. It is a fundamental principle of that law that all lands are holden
of some superior lord .... In other words, the doctrine of tenure is a
fundamental principle of the English law of real property; and to say that
the doctrine of tenure is not to prevail in this Colony is as much as to say
that the English law of real property is not in force here. This we may
safely treat as an absurdity. (157)
54
Yet issues were raised (although largely swept under the carpet) in relation
to Maori customary title. Of its nature that title predated British sovereignty. It
was recognised by Pakeha law (whether by common law or by statute). Equally
it could not sensibly be regarded as deriving from the Crown, still less from any
Crown grant. The current Canadian view is that this indigenous title is a legal
burden (of unclear jurisprudential nature) on the Crown's ultimate title (Re Calder
v Attorney General of British Columbia [1973] SCR 313; 34 DLR (3d) 145, Re
Guerin [1984] 2 SCR 335; 13 DLR (4th) 321 - which described the native interest
as sui generis; R v Sparrow (1990) 70 DLR 4th 385; Delgamuukw v British
Columbia (1991) 79 DLR 4th 185. And see W I C Birinie "The Sparrow
Doctrine: Beginning of the End or End of the Beginning" (1990) 15 Queen's U
217). Compare the judgment of the Privy Council in the New Zealand case of
Manu Kapua v Para Haimona [1913] AC 761:
... the land in question had been held by the natives under their customs and
usages. ... As the land had never been granted by the Crown, the radical
title was ... vested in the Crown subject to the burden of the native
customary title to occupancy. (765)
13
55
So the constitutional principle behind the doctrine of tenure applied to
customary land, but the doctrine of estates did not. The course of 19th century
New Zealand legislation and several cases show this clearly.
Rv Symonds (1847) [1840-1932] NZPCC 387 was a test case brought to
56
determine the validity of Fitzroy's waiver of the Crown's exclusive right to
purchase native land and to determine the nature of the term "pre-emption" in
Article 2 of the Treaty of Waitangi. The principal judgment was that of Chapman
J who held that the Crown was the exclusive source of private, ie settler, title.
But in doing so he affirmed the legal validity of Maori title, and observed
.. .it is not at all necessary to decide what estate the Queen has in the land
previous to the extinguishment of the Native title.. ,. the full recognition of
the modified title of Natives ... is not theoretically inconsistent with the
Queen's seisin in fee as against her European subjects. s (391)
57
In Re The Lundon and Whitaker Claims Act 1871 (1872) 2 NZCA 41 the
Court of Appeal said that the Crown was bound by the common law to a full
recognition of Native proprietary right. The extent of that right depended on
"established Native custom". But the Court went on to point out that all title to
land by English tenure had to be derived from the Crown. This is an important
distinction for several purposes, and throws light on other New Zealand decisions.
Thus in Mangakahia v New Zealand Timber Co Ltd (1884) 2 NZLR 345 (SC)
Gillies J (perhaps debatably) held that ownership of land according to native
custom did not carry the incidents of ownership under a Crown derived title. It
was certainly not ownership in fee simple. Accordingly, an action for trespass
based on a right to possession (as distinct from actual possession) did not lie.
58
The language of 19th century native land legislation was consistent with this.
For instance the Native Land Court Act 1865 recited that it was "expedient to
amend the laws relating to lands ... which are still subject to Maori proprietary
customs, and to encourage the extinction of such proprietary customs and provide
for the conversion of such modes of ownership into titles derived from the
Crown". "Native land" was defined as "lands which are owned by Natives under
their customs and usages", as distinct from "hereditaments" - land subject to
tenure or held under a title deriving from the Crown. The Act posited that all title
to land in New Zealand was not derived from the Crown.6
5
The full text reads:
. .. I think that it is not at all necessary to decide what estate the Queen has in the
land previous to the extinguishment of the Native title. Anciently, it seems to have
been assumed, that notwithstanding the rights of the Native race, and of course
subject to those rights, the Crown, as against its own subjects, had the full and
absolute dominion over the soil, as a necessary consequence of territorial jurisdiction.
Strictly speaking, this is perhaps deducible from the principle of our law. The
assertion of the Queen's pre-emptive right supposes only a modified dominium as
residing in the Natives. But it is also a principle of our law that the freehold can
never be in abeyance; hence the full recognition of the modified title of the Natives,
and its most careful protection, is not theoretically inconsistent with the Queen's
seisin in fee as against her European subjects.
6
The current legislation, the Maori Affairs Act 1953, defines customary land as land which,
being vested in the Crown, is held by Maori or the descendants of Maori under the customs and
usages of the Maori people.
14
59
Putting aside the status of Maori customary land, the only relevant major
reform in New Zealand has been the abolition of estates tail (which seem to have
been rare to the point of non-existence here) in 1952 and their conversion into
fee simple: Property Law Act 1952, s 16.
60
Two other points may be noted. First, although at the beginning New
Zealand land law strictly followed English doctrines it was nonetheless simpler.
All land granted by the Crown, other than by lease or other temporary tenures
such as the deferred payment licence, was freehold ("free and common socage"),
and no services attached to it. (In England before 1925 some land was "copyhold"
with different incidents, and other special rules survived.) Second, a great deal
of Crown land was granted by way of statutory leases of different forms. Much
land, particularly in the South Island high country, is still held on Crown lease.?
Our proposals would have no effect on the status of this land.
61
The present governing statute is the Land Act 1948, s 62 of which states the
terms on which Crown land may be acquired. These are, in effect, statutory
tenures, although in the nature of leases
(a)
land, other than pastoral land, may be taken on renewable lease or
purchased. A renewable lease is a lease for a term of 33 years with
a perpetual right of renewal. In certain cases the lessee has the right
to acquire the fee simple (s 63).
(b)
pastoral land - defined somewhat elliptically as land that is suitable or
adaptable primarily for pastoral purposes only (s 51) - may be
acquired on pastoral lease (s 66) or pastoral occupation licence (s
66AA). Pastoral leases are also for 33 years with a right of perpetual
renewal. They give an exclusive right of pasturage but no right to the
soil or right to acquire the fee simple, and may be granted subject to
stocking restrictions. They bear some resemblance to a "profit", ie,
the right to take some substance from land which is the property of
another, rather than a true lease.
62
These and other provisions of the Land Act will need consequential
amendments of a procedural nature if the changes proposed in the scheme are
made.
7
As at 31 March 1987, 412 pastoral leases and licences were current, relating to over
2,855,000 hectares.
15
VII
Modern English developments
63
The great property reform legislation of 1925 in England - the Law of
Property Act - did not touch the doctrines of tenure or of estates, but confined the
legal (as distinct from equitable) interests that could be created to fee simple
absolute in possession and leases "for a term of years absolute". All interests
derived out of the fee simple must be equitable: Megarry and Wade The Law of
Real Property, 123.
64
The position after 1925 has been summarised thus:
"Land is still the object of feudal tenure; the Sovereign remains the lord
paramount of all the land within the realm; every parcel of land is still held
of some lord ... and the greatest interest which any subject can have in land
is still an estate in fee simple and no more"s. The title "tenant in fee
simple" is still the technically correct description of the person who is
popularly regarded as the owner of land, and every conveyance in fee
simple substitutes the new tenant for the old as provided by the statute Quia
Emptores (1290). Nevertheless, as will be seen, for all practical purposes
ownership in fee simple "differs from the absolute dominion of a chattel
in nothing except the physical indestructibility of its subject"9. Our law has
preferred to suppress one by one the practical consequences of tenure rather
than to strike at the root of the theory of tenure itself. It remains possible,
therefore, that in rare cases not covered by the statutory reforms recourse
may have to be had to the feudal principles which still underlie our land
law. (Megarry and Wade, 37)
65
The English Law Commission proposed the abolition of freehold tenure in
a draft Statute Law Reform Bill which was circulated to interested parties in
1968. 10 A draft clause 2(1) provided
All freehold tenure of land is hereby abolished to the intent that a legal
estate in fee simple absolute in possession (including any such estate of a
corporation) shall, subject to any encumbrances, be at law, but without
prejudice to any equities, equivalent so far as the law permits to absolute
ownership and all existing seigniories are extinguished accordingly.
66
The proposed clause 2 was removed from the draft Bill before the
Commission published its report on the Statute Law (Repeals) Bill, Law Com
No 22 Statute Law Revision: First Report (Cmnd 4052). Those who were given
the opportunity to comment on the proposal before formal publication, who
8
Cyprian Williams "The Fundamental Principles of the Present Law of Ownership of Land"
(1931) 75 U 848.
9
Challis The Law o/Real Property 3rd ed 1911, 218.
10
A response to the proposal is noted in the Conveyancer's Notebook (1968) 32 The Conv 161.
16
included representatives of the legal profession, were able to persuade the Law
Commission that the abolition of the doctrine, in the form proposed, had practical
limitations.ll
VIII
Statutory reforms elsewhere
67
The doctrines of tenure and of estates have been abolished in several former
British colonial territories where the common law prevailed. Perhaps the most
interesting is Kenya. It is noteworthy that the changes here were effected prior
to independence, under the aegis of English lawyers, and in a country where
significant English settlement had taken place. Note also that in this and other
cases action was taken as part of the introduction or general revision of the land
registration system and of real property law in relation to registered land.
68
Under s 27 of the Kenya Registered Land Act 1963:
(a)
the registration of a person as the proprietor of land shall vest in that
person the absolute ownership of that land together with all rights and
privileges belonging or appurtenant thereto;
(b)
the registration of a person as the proprietor of a lease shall vest in
that person the leasehold interest described in the lease, together with
all implied and expressed rights and privileges belonging or
appurtenant thereto and subject to all implied and expressed
agreements, liabilities and incidents of the lease.
69
This was based on legislation prepared for Lagos (Nigeria) in 1960, which
because of political and constitutional vicissitudes was not adopted there. The
report of the Lagos Working Party said this:
We have prepared this draft on lines which indicate how we can achieve the
desired security of ownership with facility for transfer without importing (or
even giving the appearance of importing) all the mumbo-jumbo of English
land law. We considered in particular whether we should use the word
"freehold" which has acquired a special significance in colloquial parlance,
but decided that as we really meant absolute ownership it was better to say
SO.12
11
The proposal of the Law Commission was also considered by the Land Law Working Group
for Northern Ireland - see the consideration of the proposals of the Land Law Working Group at
para 85.
12
This comment, taken from the Lagos Working Party Report (1960) at 17, is set out in
S Rowton Simpson Land Law and Registration, at 496.
17
70
The Kenyan Act makes no mention of estates, nor does it provide for the
equivalent of estates tail or life estates. This could be a reflection of the modern
English law, where since 1925 only fee simple and leasehold estates can exist as
legal (as distinct from equitable) forms of land ownership. On the other hand (and
unlike what is sometimes said to be English law - see para 63) Kenya permits
leases for life as well as for a term of years - s 45.
71
The Kenyan approach had by 1975 been followed in Malawi, in the
Solomon Islands, and, although with some notable differences, in the Seychelles S Rowton Simpson, Land Law and Registration at 455, 457, 460.13
IX
The Crown's power to take land
72
The existence of any royal prerogative (or residue of authority belonging to
the Crown) to take land is a matter distinct from the Crown's allodial interest in
the land arising by operation of the doctrine of tenure. The rules applicable to the
royal prerogative in its operation in New Zealand were the rules of common law;
and in fact it is said that the royal prerogative is a creature of the common law
(Halsbury's Laws of England, 4th ed, vol 8, para 890).
73
However, the royal prerogative may be abrogated by legislation. If
Parliament has enacted legislation to achieve what might formerly have been done
by exercise of the royal prerogative, then the statute should prevail. Thus any
prerogative right in relation to the taking of land for public purposes is presumably
overtaken by the acquisition and compensation provisions in the Public Works Act
1981.
74
To remove any doubt about the possibility that a royal prerogative remains leaving aside the royal prerogative to requisition land in a wartime emergency
which should remain as a special case - the draft scheme proposes that the Crown
should only acquire any land or any interest in land pursuant to an enactment or
by agreement (see cl 8 of the scheme) with an express saving of the prerogative
to requisition land in wartime. This would be consistent with the Law
Commission's recommendations in NZLC R22, Final Repon on Emergencies (and
see para 130 of this paper).
13
In the Seychelles the corresponding legislation dealt with the position of the proprietor of
a usufructuary interest and of a charge to accord with existing laws there. The Seychelles would
appear to have a civil law system of land law, under which a "usufruct" is the approximate
equivalent of the common law life interest.
18
x
The case for change
75
First, the feudal origin and significance of the doctrine of tenure have no
relation to contemporary New Zealand. It may be thought remarkable that the
manner of land ownership in New Zealand in 1992 reflects English feudalism of
900 years ago. While there is no generally perceived sense of inadequacy of land
ownership rights, and change should not be made frivolously, or perhaps in
isolation, the opportunity should be taken to do away with an obsolete doctrine if
that can be done in a simple manner and without undermining the present system.
76
Second, the doctrine of tenure is now a fiction, inconsistent with modern
notions of property and with a modern land law. If it had any practical
consequences it would be politically unacceptable. One may recall the leasehold
v freehold battles in New Zealand during the period 1880-1910, in which the
policy of giving settlers land by way of long-term leases at generally very low
rents was roundly rejected and has never been seriously revived.
77
Third, few branches of the law are so governed by arcane and archaic
terminology. The certificate of title of an "owner" of land in New Zealand under
the land transfer system recites that "X Y is seized of an estate in fee simple
(subject to such reservations, restrictions, encumbrances, liens and interests as are
notified by memorial under written . . . [in certain land]". This is doubly
obscure. Yet ownership of land concerns everyone. Most of us are or hope to
be owners, most of us deal in land at some time. Any changes that help to make
this part of the law more intelligible are desirable unless they have overriding ill
consequences.
78
Fourth, the proposed automation of the land transfer register will provide
a convenient and perhaps unique opportunity to move to more modern forms and
concepts. These will themselves assist the automation.
79
Fifth, it is illogical that where the Crown owns land by acquisition or
purchase it may hold the land in fee simple from itself. The law ought to move
away from fictions of this kind.
80
Sixth, no one creating a new property system today would contemplate
introducing the concept of tenure.
19
XI
The scope of reform
81
If there is to be change, is it feasible to declare that the owner of an estate
in fee simple in a piece of land becomes the (allodial) owner of that land, and
leave it at that? The aim would be not to affect the concept of tenure in other
cases (notably between lessors and lessees) or the doctrine of estates. This is what
the United States statutes appear to have done. Analysis suggests however that to
stop there is neither logically nor conceptually sound, nor perhaps is it adequate
if the law is to be sensibly modernised. As well, it could create unnecessary
uncertainties and problems that only litigation could resolve.
82
The term "estate" has more than one meaning, even to lawyers. It may
mean the whole of a person's property, and this is probably the most common.
Thus we speak of the "estate" of a bankrupt or of a deceased person. "Real
estate" means simply land, as in the term "real estate agent". Popularly it also has
the meaning of a large piece of land. In the present context however it refers to
the nature of certain interests in land - freehold or leasehold or a particular kind
of freehold, notably "in fee simple".
83
All estates in land are interests in land but not all interests in land are
estates. 14 So a mortgagee has a charge over the land, IS a landowner may have a
right of way over someone else's land (an easement) or a right to take some
substance eg, gravel from that land (a "profit"), and so on. These are not
"estates". They are interests in land, some of them, eg, easements and profits,
described in the terminology we have inherited from feudal times as incorporeal
hereditaments. 16 (An estate on the other hand is a "corporeal hereditament", on the
basis that it is something real and tangible and not just a right. In truth, an estate
in land is as abstract and therefore incorporeal a thing as can be imagined. For
present purposes the terms corporeal and incorporeal can be ignored.)
84
The American Restatement of the Law of Property defines an "estate", for
the purposes of the Restatement as
14
What is sufficient to constitute an interest in land has its own problems and uncertainties:
see the jungle of cases cited in 3 Stroud's Judicial Dictionary 5th ed 1333-6, most of them
interpreting the words used in numerous statutes. To reconcile these decisions would be a herculean
task.
See s 100 of the Land Transfer Act 1952 and the Law Commission proposals in relation to
15
the mortgage as a charge in NZLC PP16 at para 282; if those proposals are adopted, the only
exception to the rule that all mortgages are charges will be the circumstance of the mortgage or
submortgage by way of registered memorandum of transfer.
16
And it is worth noting in this context the observation of Cooke P in Tainui Trust Board v
AG [1989] 2 NZLR 513 that
... a right to work mines and carry away the minerals won is an incorporeal hereditament
(because it is a right over land in the possession of another). If of indeterminate duration it
is a freehold interest; if of fIxed duration a chattel interest. In either case it is an interest
in land (Webber v Lee (1882) 9 QBD 315) but not an estate in the narrowest sense of that
term as it does not give use of the parcel of land as a whole. (523)
20
an interest in land which:
(a)
is or may become possessory;
(b)
is ownership measured in terms of duration. (23)
This seems an appropriate definition for the purposes of New Zealand law as long
as one bears in mind that there has to be an "interest in land" as well as a right
to possession. Estates are a subspecies of interests in land. A licence, for
instance, gives the licensee lawful possession. But a licence does not amount to
an interest in land: see Street v Mountford [1985] AC 809.
85
In Northern Ireland, the Survey of the Land Law of Northern Ireland (1971),
by a working party from the Queen's University of Belfast, proposed the abolition
of feudal tenure (paras 37 - 38). Twenty years later, in The Final Report of the
Land Law Working Group on the Law of Property, the Office of Law Reform
(Department of Finance and Personnel for Northern Ireland), recommended against
the adoption of this proposal (voI1, 58-59). Its comments are not without interest
in the present context. The Survey had proposed that the "fee simple estate in
possession should become absolute ownership, but still subject to any estates ...
to which it is now subject." It was pointed out in the report that the word "estate"
had no significance outside the feudal context and that the proposal amounted to
cutting away a basic principle of land ownership while keeping a whole vocabulary
that was inexplicable without it. The report added: "A change in language would
be apt, and probably readily digested, if all titles to land were registered" - which
for all practical purposes is the state of affairs in New Zealand.
If owners in fee simple are to become allodial owners, they will own the
86
land itself. It would be meaningless and contradictory to say that owners have any
estate in the land or that they will any longer hold it "in fee simple". So to this
extent at least the concept of "estate" must disappear. That is not to say that it has
to be expressly abolished.
87
Life and leasehold interests however require a more detailed examination.
The question is how any changes can best be accommodated.
88
The relationship between the doctrines of tenure and estates is both integral
and intricate. As pointed out above in the Introduction, the second flowed from
the first. Under the doctrine of tenure, whereby all land was held from the
Crown, the question had to be faced: what was it that the King's tenant owned?
This was answered by the doctrine of estates. The law created an abstract entity
called the estate and interposed it between the tenant and the land. Ownership was
thus of something wholly conceptual or fictional:
As the law of real property became distanced from the physical reality of
land and entered a world of almost mathematical abstraction, it was possible
to accord an immediate conceptual reality to each "slice" of time represented
by an "estate". (Gray, Elements of Land Law, 59-60)
21
89
So the notion of estates enabled land ownership to be divided in respect of
time:
... the land itself is one thing, and the estate in the land another thing, for
an estate in the land is a time in the land, or land for a time, and there are
diversities of estates which are no more than diversities of time ...
Walsingham's Case (1573) 2 Plowden 547, 555; 75 ER 805, 816.
90
But the rights of ownership can be divided in time without the need for
conceptual fictions. There are no estates in chattels but the leasing of chattels is
commonplace. For example A can have exclusive possession of B's motor car
(either conditionally or unconditionally) for one year. The lessor B will continue
to own the car, and will resume possession of it after the year has elapsed.
Life interests
91
Can the principle that ownership can be divided in terms of time be used to
make those who are now life tenants allodial owners for the period of their life?
This would mean that the person who is to own the land after the life owner's
death has merely a future ownership.
92
There is no problem with ownership of a future interest as such; it is
possible now and ought certainly to be retained. Three considerations arise,
however:
•
First, to make life tenants allodial owners for the period of their life
would seem to reduce what is (at least in many cases) a present fee
simple interest of the person who is to take after cessation of the life
interest into a mere future right, as the examples below show.
•
Second, on several points the present law is obscure or unsatisfactory
and clarification is desirable.
Example 1. A (a fee simple owner) transfers his land to B for life
without doing more. In that case A has what is technically called a
reversion. The land goes to him or his successors on B's death, and
there seems little doubt that even during B's life A retains a fee simple
estate subject to B's life estate.
Example 2. A transfers the land to B for life with remainder to C,
who is alive at the date of the transaction. In that case A has divested
herself completely of her interest in the land. C is said to have a
vested remainder, and according to modern standard English
textbooks appears to be the fee simple owner subject to B's life
interest. On the other hand, in Burton, Real Property, it is said that
.. .if the owner make an alienation at once of the whole fee
simple, he divests himself entirely of every feudal relation; and
the Feofee, though he have only a particular Estate, holds
immediately of the Lord, and not of him to whom the
Remainder is given. (8-9)
22
The position cannot be said to be certain.
Example 3. The remainder is given to such of C's children as are
living at B's death. These children mayor may not have been born.
Their remainder is contingent. Who owns the fee simple in the
meantime?
Although contingent remainders have been recognised by the law for
centuries, surprisingly the answer to this question also is uncertain.
The fee simple might revert to the Crown for the duration of the life
estate, so that the life tenant would hold immediately from the
Crown. Alternatively:
Some said that ... the fee simple was in abeyance, or in the
clouds, or in the bosom of the law; others argued on the
principle that what the grantor had not conveyed away he still
had in him and so said that the fee simple remained vested in
the grantor or, if he was dead, his devisee or heir. The
question was never finally settled, but the latter view more
nearly corresponds with modern ideas. (Megarry and Wade,
182-183)
In none of these examples apparently can either A or C get a
certificate of title for the fee simple interest while B is alive: Land
Transfer Act 1952 s 95(2).
Example 4. A leases land to B for B's life, with remainder to C.
It seems that such a lease, which is recognised by s 115 of the Land
Transfer Act, anomalously confers not a leasehold but a freehold
interest for life. (Amalgamated Brick & Pipe v O'Shea [1966] 1
NZCPR 580; Sin clair v Connell [1968] NZLR 1186.) If the
remainder is vested, C presumably has the fee simple and enjoys the
benefits of the covenants in the lease. But who can re-enter if B is
in breach? A or C? If the lease is a "freehold", it is at least arguable
that no one can, though the probable answer is that C can re-enter.
These uncertainties are practical and not merely academic defects.
Conceptually, a lease is quite a different creature from a life estate,
and in practice a whole body of law is applicable to leases that has no
relevance to life estates. Preservation of the lease for life is sensible
considering that a lease may be granted for a period long exceeding
the duration of any possible life, but its nature should be clarified.
•
Third, the quality as well as the duration of the life estate is inferior
to the estate in fee simple.
In particular, at common law the life tenant is liable for what is called
"voluntary waste". This is the commission of positive acts which
diminish the capital value or alter" the nature of the land (including
buildings and structures on it). For example, it is voluntary waste to
23
pull down a shed. Still less is the life tenant permitted to cause
wanton damage to the land.
93
In the Commission's view, a life estate is properly to be regarded as a
dependent interest, the fee simple (at present) or the allodial ownership (under the
scheme) always being vested in someone else. This is, of course, the status of a
lease, even a lease for a very long term. And just as a lease is subordinate to the
superior title of the fee simple proprietor, the present life estate could sensibly be
so regarded if allodial ownership were introduced. This is what the scheme
proposes. It also takes the opportunity to eliminate obscurities and anomalies.
Leases
94
What is the significance of the fact that a lessee has an "estate" in the land?
Does it add anything to the fact that a lease gives exclusive possession of the land
in accordance with its terms, a possession that the law recognises and will enforce
by appropriate remedies? Is the description of a leasehold interest as an estate
simply a theoretical way of classifying it? If so, it does not seem to matter
whether or not any legislation calls a leasehold interest an estate, but it might be
better to get away from the old terminology altogether. However, care is
necessary in making any change in the terminology not to create an impression
that subleasing is no longer permitted. The scheme proposed does not and is not
intended to affect a lessee's ability to create subleases in accordance with the rules
which presently apply to leasehold and subleasehold estates.
XII
Maori land
95
The Law Commission is required by its constituting statute to take into
account te ao Maori (the Maori dimension) in all its recommendations. So it is
necessary to consider Maori land in the context of the changes the Commission is
suggesting in this paper.
96
Maori land is not to be equated with land owned by Maori. Many Maori
have acquired for homes, farms and businesses land that has already been alienated
by the Crown -land that the Maori Affairs Act 1953 calls "general land" . There
is no way of knowing how much "general" land is in Maori hands, but its
acquisition, holding and disposal are governed by the same laws irrespective of
who owns it. It need not be considered separately.
97
Maori land proper is the remnant of land in New Zealand that has never
passed out of its original Maori ownership. Maori land may be Maori freehold
or Maori customary land. Almost all of it is in the first category. It is land the
ownership of which has at some time been ascertained by the Maori Land Court
and for which a fee simple title under English tenure has been granted.
24
98
Maori freehold land poses no problems under our proposals. Like other
land it will be converted to allodial land owned by whoever holds an estate in fee
simple in it at the date of the conversion. Of course it will continue to be
governed by the special laws now applicable to Maori land. Nothing in our
proposals is to be taken as altering these.
99
The question of Maori customary land, on the other hand, is sensitive. In
s 2 of the Maori Affairs Act, Maori customary land is defined as "land which,
being vested in the Crown, is held by Maoris or the descendants of Maoris under
the customs and usages of the Maori people".
100 The Maori Affairs Bill, introduced in 1987 to replace the 1953 Act, takes
quite a different approach. Clause 141(2)(a) simply provides that land that is held
by Maori in accordance with tikanga Maori has the status of Maori customary
land. By cl 143 the Maori Land Court has jurisdiction to determine and declare
the particular status of any parcel of land. No reference is made to the Crown,
and it is not clear whether this is meant to change the fundamental status of
customary land. We are inclined to think it is not. 17
101 Maori customary land is not held under any form of English tenure; nor
is it an estate in the land. At first sight therefore proposals to do away with
freehold tenure and the terminology of estates are irrelevant to customary land,
which can properly be ignored.
102 The matter is, however, not so simple. The essence of what we propose is
to convert the estate in fee simple into full (allodial) ownership. What is now
freehold land would no longer be held from the Crown. But if this is done only
for land that the Crown has granted, could the status of Maori customary land be
said to have been relatively depreciated? Such land would continue to be vested
in the Crown as allodial owner, although held by Maori on a basis that (given the
continuance of s 155 of the Maori Affairs Act) is not legally enforceable against
the Crown.
103 In principle, the proprietors of land subject to Maori custom would seem to
have as good a claim to allodial ownership as a person holding under English
tenure. Indeed, since Maori ownership long antedates any Crown title, which
began in 1840, the claim could be considered stronger. It might be argued that
failure to give equivalent status to customary ownership is hard to reconcile either
with Articles 2 and 3 of the Treaty of Waitangi or with the rule of law.
104 The prevailing view is that hardly any Maori customary land now remains,
although exactly how much is uncertain. Virtually all land in New Zealand has
been acquired by the Crown free of Maori title - either by the operation of law,
17
The phrase "being vested in the Crown" seems first to have appeared in the Native Land
Act 1909. The equivalent defmitions in the Native Land Act 1894 and earlier legislation did not
include it. The explanatory memorandum to the 1909 bill, written by Sir John Salmond, does not
refer to it directly. His purpose may well have been to emphasise the Crown's underlying title, but
he would certainly not have thought he was altering the law by !nserting it: see Manu Kapua v Para
Haimoana [1840 - 1932] NZPCC 413, 416; [1913] AC 761, 765. Equally, omitting it from the
Bill and reverting in this respect to 19th century formulas is unlikely to be held to overturn what has
been generally taken for granted.
25
by confiscation or by purchase - or has been converted under successive Maori
land legislation into Maori freehold land held for an estate in fee simple. It may
be significant that only one of the submissions to the select committee on the
Maori Affairs Bill 1987 made any mention of customary land or of s 155. This
was a submission by Mita Carter and Wiremu Mikaera in relation to fishing
reserves on the South Wairarapa Coast. It has been described to us as not being
an issue for most Maori people. Yet the principle remains. And there is an
element of question begging in an assertion that the amount of Maori customary
land is now negligible. It supposes that the acquisition of Maori customary land
by the Crown was always valid and effective, and even apart from s 155 of the
Maori Affairs Act could not be challenged. This is not inevitably so.
105 There are active and contentious questions about where the burden ought to
lie of showing whether a piece of land is Crown land or Maori land. Some would
argue thus. Indubitably, all land in New Zealand was originally owned by Maori,
and at common law and under both the Treaty of Waitangi (as interpreted in R v
Symonds [1840-1932] NZPCC 387) and subsequent statutes only the Crown could
legally acquire land from them: the doctrine of the Crown's right of preemption. 18 Notwithstanding the Crown's radical title, therefore, it should be for
the Crown to show that it had lawfully extinguished Maori title. This might be
(a)
by operation of the common law, as arguably in respect of the
foreshore,
(b)
by statute, as in the case of confiscations during the New Zealand
Wars and perhaps of riverbeds,
(c)
by purchase or by gift from the Maori owners.
In other words, the burden of proof is on the person who claims to own land as
against the former owners.
106 There is a logic to this which makes it impossible to simply dismiss.
However, we do not think it really impinges on our proposals. These do not
assume any particular answer to the location of the burden of proof. At the level
of pleading the burden would depend upon the way in which the issue came up who was the plaintiff and what relief was sought. If, for example, the Crown
alleged that a Maori was wrongfully in possession of Crown land that was free
from customary title, the Crown must prove the status of the land. If a Maori
sought a declaration that certain land occupied by the Crown was customary land
(setting aside s 155 of the Maori Affairs Act) the burden of proof would be on the
Maori claimant.
107 The deeper issue - whether land should be assumed to be Crown land on the
one hand or Maori land on the other - is a political one that the Commission does
have to answer within the context of this paper.
18
A useful discussion of the Crown's right of pre-emption can be found in Dr Paul McHugh's
book, The Maori Magna Carta, New Zealand Law and the Treaty ofWaitangi, at 78-80.
26
108 The choice thus lies between converting Maori customary title to allodial
ownership and making no change in the present position. Against changing the
existing status of Maori customary land through the present proposals is that the
scheme's purpose is neither to diminish any property rights of Maori that modern
jurisprudence might recognise, nor by a sidewind to enlarge Maori rights against
the Crown. These questions are for another occasion.
109 To give Maori customary land the character of full ownership as against the
Crown might create alarm (however unfounded) on one side and unjustified
expectations on the other. Would it be possible to claim allodial title to land
whose acquisition by the Crown was disputed? At present such claims would be
blocked by ss 155 and 157 of the Maori Affairs Act. Section 155 provides that
Maori customary title is not available or enforceable by proceedings in any court
against the Crown. Under s 157 a proclamation by the Governor-General that any
land vested in Her Majesty is free from Maori customary title is to be conclusive
of the fact proclaimed. The Maori Affairs Bill at present before Parliament would
repeal those sections along with s 156 and 158 - presumably for the sort of
reasons suggested in the Law Commission's background paper on Maori fisheries:
The Treaty of Waitangi and Maori Fisheries - Mataitai: nga Tzkangi Maori me te
Tzriti 0 Waitangi (NZLC PP 9) at 119ft). But the effect of the simple repeal in
combination with s 6 of the Limitation Act 1950 could be to allow the validity of
past acquisitions of Maori land to be reopened judicially.
110 Moreover, a mechanism now exists in the form of the Waitangi Tribunal for
hearing grievances about the loss of land and making findings on them. In this
tribunal the parties stand on an equal footing and issues are decided on the basis
of history and substantial justice. Irrespective of what we might recommend, this
route will remain. It may well be the most suitable way to deal with issues of this
nature.
111 This avenue has an additional advantage. If the Crown alienates or
otherwise disposes of land to anyone, that person takes the land free of any Maori
customary title. This appears to be the effect of s 158 of the Maori Affairs Act
1953 (not repeated in the 1987 Bill). It reads
No Crown grant, Crown lease, or other alienation or disposition of land by
the Crown ... shall in any Court or in any proceedings be questioned or
invalidated or in any manner affected by reason of the fact that the
customary title to that land has ... not been extinguished.
112 Even in the absence of that section, a registered proprietor of land under
the Land Transfer Act is protected: s 62 Land Transfer Act.
113 However, ss 27 to 27D of the State-owned Enterprises Act 1986, as inserted
by s 9 of the Treaty of Waitangi (State Enterprises) Act 1988, contain a code
effectively overriding this where land is disposed of to a State-owned enterprise
and a claim is made in respect of that land to the Waitangi Tribunal. The Land
Transfer title is expressly subject to the Crown's right to take the grant back in
order to satisfy a recommendation of the Waitangi Tribunal.
27
114 On balance, the Law Commission believes that it is best to leave the status
of customary land aside. Our proposals are therefore intended to be neutral on this
issue - see cl 2 of the scheme at 34, and clause 15 at 56.
XIII
Issues of abolition
Is abolition of tenure worlh doing by itself?
115 We do not propose that abolition of tenure be undertaken on its own.
Rather, it can be done concurrently with the review of the Land Transfer Act now
being undertaken by the Department of Justice. (The Law Commission's review
of the Property Law Act will precede it but any new Property Law Act can easily
be adapted to be consistent with the scheme.) The opportunity to get rid of
anachronisms is unlikely to recur for a long time. Moreover, the forthcoming
computerisation of the land register which has provided the impetus for the review
of the Land Transfer Act provides a natural and convenient opportunity to make
a change.
Would difficulties arise from the fact that arrangements have been tailored for
150 years to.fit the present system, however inappropriate it is in the abstract?
116 This is the question that will properly be asked. We do not believe that any
such difficulties will arise from the scheme which is proposed.
XIV
Objections and responses
First, to abolishfreehold tenure would subtly diminish the "public" character
of land and its social dimension, and encourage the perception that land is a mere
commodity like any other property. The Law Commission's obligation to take into
account te ao Maori (the Maori dimension) is in point here.
117
118 This objection is subjective and is hard to weigh. However, full ownership
of land as against the State is not the same thing as unlimited or irresponsible
ownership. It is compatible with a sense of trusteeship or kaitiaki on behalf of
future generations or towards the land itself. Ultimate State ownership (as at
present) does not necessarily promote this sense. Equally, it can, as historically
it sometimes did, support a philosophy of exploitation and development. As the
quotation from Sir John Salmond (para 11, 2) shows, no one supposes that
ownership of land can be absolute.
28
119 The notion of individual ownership is in line with Pakeha tradition, and the
abolition of tenure today could hardly depreciate Maori land rights further. On
the contrary, in emphasising that the ownership of Maori land would no longer
legally derive from the Crown the proposals could enhance them. The proposals
are consistent with Article 2 of the Treaty of Waitangi in that the Crown would
no longer be legally interposed between the Maori and their lands. Indeed one
could argue that for the Crown to hold the ultimate title to Maori land is not
consistent with the recognition of tino rangatiratanga by the Maori version of the
Treaty.
120 It has been suggested to us that some Maori, particularly older Maori, value
the Crown grant or its equivalent as being a guarantee by the Queen of the
security of their ownership of their land. No title issued by a State official could
have this effect.
121 The fact is, however, that what the holder of Maori freehold land receives,
and has received for generations, is a certificate of title under the Land Transfer
Act, signed by the District Land Registrar: s 12 Land Transfer Act 1952. Crown
grants as such have not been issued since at least 1885. Section 12 of the Land
Transfer Act 1885 provided:
From and after the coming into operation of this Act, no Crown grant shall
be issued for any land subject to the provisions of this Act, but in lieu of
such grant the Governor shall, by warrant under his hand, direct the
Registrar to issue a Certificate of Title for such land ... and every such
certificate ... shall have the force and effect of a Crown grant.
(And see the commentary to cl 7 of the draft scheme, at 47, where it is noted
that new alienations by the Crown in fee simple are now made under s 116 of the
Land Act.)
122 The certificate is signed by the District Land Registrar, and the warrant
itself is filed in the Registrar's office for reference. Subsequent forms of certificate
of title, as for instance when land is subdivided, read:
, nineteen hundred and
THIS certificate, dated the
day of
under the hand and seal of the District Land Registrar of the Land
Registration District of
, witnesseth that
is seised of an estate in fee simple, subject to such reservations,
restrictions, encumbrances, liens, and interests as are notified by
memorial underwritten or endorsed hereon; subject also to any
existing right of the Crown to take and layoff roads under the
provisions of any Act of the Parliament of New Zealand, in the land
hereinafter described, as the same is delineated by the plan hereon
bordered
, be the several admeasurements a little more or less,
that is to say: All that parcel of land containing
District Land Registrar
(Land Transfer Act 1952, First Schedule, Form No 2)
29
123 (All land over which Maori (that is, customary) title has been extinguished
since 1871 is subject to the provisions of the Land Transfer Act - in addition of
course to land subsequently brought under that Act.)
124 Second, the doctrines of tenure, in particular, and of estates, have created
a logical and familiar jurisprudence of land ownership. Unless or until something
was set in its place, an uncomfortable uncertainty might exist. Whatfor instance
would be the ultimate source of land ownership?
125 One may doubt if the present principles of land law are familiar to many
except lawyers, or are properly understood by laymen, or would be thought
sensible if they were understood. A simpler and more rational approach, which
did not impair existing rights, is its own justification.
126 As a matter of history the origin of particular land titles would of course
continue to be a Crown grant or its equivalent. With Maori customary land that
source is inapplicable. One might equally ask at present what is the ultimate
source of ownership for Maori customary land. Legally the foundation of allodial
ownership would be the registered title. The abolition of freehold tenure could
thus be seen as the logical completion of the land transfer system.
127 Third, it would infringe a basic Crown prerogative. The Crown's right to
ultimate dominion over the land is a constitutionally fundamental doctrine.
128 It is a prerogative without any necessity and without any significance.
International law recognises a basic distinction between territorial sovereignty and
the title to land. The former does not require the latter. All legal systems
acknowledge the State's right to take land for sufficient public purposes and
subject to compensation - the right of "eminent domain". This would not be
affected by the proposals. Crown rights to dispose of and acquire land are closely
regulated by statute (Land Act 1948, Public Works Act 1981), as they should be.
The scheme envisages that the Crown will continue to own all land not owned by
others.
129 Fourth, it might impair the ability of the State to acquire land for public
purposes, or regulate its use in the public interest. The need to do these things
may arise as well from the duty of the Crown under international law or to carry
out its obligations under the Treaty of Waitangi. Te ao Maori is relevant here
also.
130 It does not have any such effect. "Fee simple" is already indefeasible, and
the holder of a fee simple estate is immune from competing claims, but the Crown
(and Crown agencies and other parties defined by statute - see Part VII of the
Resource Management Act 1991) can acquire land by statute (the Public Works
Act 1981). Likewise the Crown may be able to take land under prerogative
emergency powers which are, admittedly, limited in scope. (In its Final Report on
Emergencies, NZLC R22, the Law Commission noted that the Queen's
representative in New Zealand has powers in the time of emergency to requisition
property needed for the defence of the realm; there is also the possibility that the
30
prerogative could be exercised to deal with a peacetime emergency, if that
emergency was not covered by existing legislation.)
131 Likewise, the scheme would have no impact on planning or resource law,
or limit the Crown's ability to fulfil its obligations under the Treaty of Waitangi.
In modem times, ownership even in the full sense does not carry an unrestricted
right to use. That is well understood even by people who presently believe that
they are outright owners of their land. Countries with allodial ownership of land
have planning legislation analogous with New Zealand's. Statutes regulating the
use of land would continue to apply exactly as before. Moreover, the Crown's
rights to minerals on land held by others are now, and ought to be, defined and
governed by statute rather than flow from any doctrine of paramount ownership.
Fifth, the terminology could be simplified and clarified without altering such
long established doctrines as tenure and estates.
132
133 This would mean using new and different language for the same thing. It
would carry its own danger of confusion, and would simply be toying with the
issue. To legislate only to change words is wasting the time of Parliament.
134
Sixth, it would create legal confusion.
135 No confusion should result. The proposal eliminates much obsolete
terminology, which may be obscure even to some lawyers. And it restates the law
more directly and more clearly. Land would be owned in much the same way as
chattels have always been owned, and the law would be closer to what most
people suppose it to be. But the substance of the law would be largely unchanged
and existing rights, powers and obligations would not be affected.
136 There is a significant precedent here. Before 1874 in New Zealand the rules
relating to succession to property on the death of the owner differed radically
depending on whether the property was "real" or "personal" - approximately
corresponding to interests in land and other property. A series of statutes ending
with the Administration Amendment Act 1939 abolished the special rules
governing succession to land, and provided a single code based on the rules that
had applied to succession to personal property. There seems no reason why the
same cannot be done for the substantive land law, recognising however that
interests in land are inherently likely to be more complex than those relating to
chattels.
xv
Conclusion
137 The examination that the Law Commission has made of the land law of New
Zealand and other countries, and its effects, has persuaded it that there would be
advantages in converting present estates in fee simple into allodial ownership, and
31
making consequential changes. It considers that the objections that can be offered
to doing this can be answered, and that the necessary legislation could be
incorporated without great difficulty in an existing statute, particularly if a new
Property Law Act is enacted as t.lle Law Commission has recommended. The
review now being made of the Land Transfer Act provides a unique opportunity
to do away with feudal elements that survive in our land law. The Law
Commission is therefore inclined to favour change.
138 The proposals in this paper break such new ground in New Zealand (and
nothing similar has been done in Australia, Canada or England) that we are
particularly anxious to obtain comments on the scheme, or on any aspect of it, and
to hear from anyone who considers that the arguments in support of change are
fallacious.
32
33
APPENDIX A
REFORM OF TENURES - OUTLINE OF SCHEME
CONTENTS
1
Land described
2
Fee simple to become allodial ownership
3
Conversion of estates
4
Rules for special cases
5
Application of existing rules
6
Crown owns residual land
7
Crown may transfer land
8
Crown may take land under statute
9
Escheat abolished
10
Co-ownership
11
Land transferable
12
Future interests may be created
13
Equitable rights unaffected
14
Land Transfer Act unaffected
15
Maori customary land unaffected
16
Repeals
17
Consequential amendments
34
[DRAFT]
REFORM OF TENURES - OUTLINE OF SCHEME
1
Land described
For the purposes of this scheme, land includes the space above any land and
all waters, watercourses, plantations, gardens, mines, minerals and quarries,
and all trees and timber that are thereon or thereunder.
35
COMMENTARY
Clause 1
For practical reasons it is important to align the description of land for the purposes of the
scheme with the definition in the Land Transfer Act. For example, land transfer titles can
be and have been issued for minerals or specific minerals under land, leaving the surface
and everything else below and above the surface in separate "ownership". But the existing
Land Transfer Act definition is in part inappropriate and inconsistent with the object of the
scheme. It reads:
"Land" includes messuages, tenements, and hereditaments, corporeal and
incorporeal, of every kind and description, and every estate or interest therein,
together with all paths, passages, ways, waters, watercourses, liberties, easements,
and privileges thereunto appertaining, plantations, gardens, mines, minerals, and
quarries, and all trees and timber thereon or thereunder lying or being, unless
specially excepted.
Parts of this are repetitive, eg an "interest in land" includes an easement, which is
separately listed. And "hereditaments" are all interests in land. On the other hand, it
fails to mention the airspace above the surface, although the advent of unit and stratum
titles makes this of growing importance. (A recent decision of Anderson J, Disher v
Farnsworth (Unrep, High Court, Tauranga, CP 72/89,3 October 1990) found that the area
above a unit title was not common property of the unit title owners; if this conclusion is
correct it highlights the existence of a difficulty with the Unit Titles Act which makes no
provision, express or implied, for air space.)
The scheme does away with the terminology of "estates"; the definition should therefore
not refer to them. And to perpetuate terms such as messuages, tenements and corporeal
and incorporeal hereditaments is alien to the scheme's policy as well as being unnecessary.
It is a question whether "land" should be defined to include all interests in land. This is
a common drafting practice. However the scheme deliberately distinguishes the ownership
of land, and of certain lesser interests in land. To say initially that whenever the scheme
uses the term "land" it embraces every interest in land may at best be confusing. Nor does
it seem necessary. Clauses 10 and 11, for instance, refer specifically to "land, and any
interest in land". The definition clause therefore makes no reference to interests in land.
36
2
Fee simple to become allodial ownership
(1)
Every person who at the commencement of the scheme is seized of a
freehold estate in fee simple in any land, whether or not that estate is
absolute or is in possession and whether or not that land has been
brought under the Land Transfer Act, shall become the allodial owner
of that land subject to all then existing rights and encumbrances.
(2)
Maori customary land, that is, land which at the commencement of the
scheme, being vested in the Crown, is held by Maori or the descendants
of Maori under the customs and usages of the Maori people, shall be
owned allodially by the Crown but shall continue to be held by those
persons under those customs and usages.
37
COMMENTARY
Clause 2
This is the essence of the proposed reform, and almost everything else in the scheme is
consequential on it.
The description of Maori customary land follows the definition in s 2 of the Maori Affairs
Act 1953. The question of the scheme's application to Maori customary land is discussed
in Part XII of the paper. Crown ownership of land under the scheme (see cl 6) would
be subject to all existing rights and burdens, whatever they might be found to be. An
owner of land under Maori custom would have the same right as now to prove title in the
Maori Land Court and have a land transfer title issued to him or her: Maori Affairs Act,
ss 161 - 168. Under the scheme that would then make him or her the allodial owner.
The clause is not limited to the holders of a fee simple estate absolute or in possession,
because of the possibility of determinable fees (see comment on cl 3) and the need to deal
with fee simple estates otherwise than in possession; see comment on cl 4.
The term "freehold" will disappear from the law if· the scheme is adopted. Allodial
ownership is greater ownership than "freehold". That is not to say that it may not continue
in popular use as a synonym for allodial ownership or (inaccurately) to mean land owned
free from any mortgage.
38
3
Conversion of estates
(1)
Every person other than the Crown who at the commencement of this
scheme
(a)
holds a freehold estate in fee simple in any land becomes the
allodial owner of that land;
(b)
holds a freehold stratum estate in any land becomes the allodial
owner of a stratum interest in respect of that land;
(c)
holds an estate for life (including an estate for the life of another
person) in any land becomes the owner of a life interest in that
land;
(d)
holds an estate as lessee or sublessee (including a leasehold stratum
estate) in any land becomes the owner of a leasehold or
subleasehold (or leasehold stratum) interest in that land, as the
case may be.
(2)
All references in any enactment or in any instrument (whether the
enactment is made or the instrument executed before or after the
commencement of the scheme) to an estate in land, or to an estate of any
kind in land, or to the holder of any estate, shall be construed
accordingly.
(3)
After the commencement of this scheme, no estate in land may be
granted or disposed of, and the effect of any such purported grant or
disposition shall be to grant or dispose of the land, or the corresponding
interest in land.
(4)
All references in any enactment or in any instrument to tenure of any
kind in relation to land shall be construed as a reference to ownership
of the land or the corresponding interest in land (as the case may be).
39
COMMENTARY
Clause 3
The ownership of an estate in land may be divided in either time or space. Formerly the
law recognised four different temporal estates:
(a)
(b)
(c)
(d)
fee simple
fee tail
life estate
leasehold estate.
The first three were freehold estates. The fee tail has been abolished in New Zealand; the
others remain. Legal life estates are unusual but by no means unknown. Equitable life
estates (ie, behind a trust) are common. They may arise under wills or lifetime
settlements. A life estate may also arise, it would appear, from the grant of a lease for
the lessee's life and is registrable by virtue of s 115 of the Land Transfer Act.
A new form of estate, the stratum estate, was created by the Unit Titles Act 1972,
principally to give fuller effect to the increasingly common desire for separate ownership
of flats and offices in multistorey buildings. The stratum estate is a hybrid. It may be a
freehold or leasehold estate. As a freehold estate it consists of a fee simple estate in the
unit comprising the flat or office, and a share in the fee simple estate in the common
property (such as access ways and the land itself on which the building stands) and in other
units to which the proprietor of the unit is contingently entitled: s 4(2).
A stratum estate may be dealt with (eg, by sale, lease, mortgage or settlement) as if it
were a fee simple estate. The scheme needs to provide for this form of ownership.
Determinable fees should not pose problems and may not need to be mentioned expressly.
It is not certain whether this species of beast is extinct, or still in practice to be found in
New Zealand (we know of none)19 but a stratum estate under the Unit Titles Act 1972 is
at least analogous to a determinable fee. Sections 45, 47 and 48 of that Act deal with the
situation where the building in respect of which a stratum estate has been created is
destroyed or is to be demolished. In that case the estate in the unit concerned is
determined: s 4(2)(a). The owner of the estate will become the allodial owner in
accordance with the scheme, but that ownership may be divested on the occurrence of
some future event. The documents will show who is then the owner.
There is also apparently the possibility of conditional fees. According to Gray, Elements
ofLand Law, determinable and conditional fees are notoriously difficult to distinguish, and
the distinction was said judicially in 1893 to be "little short of disgraceful to our
jurisprudence" (73). If necessary they could perhaps be deemed to be determinable fees
for the scheme's purposes, but, as we have said, we believe there is no need to mention
either.
Subclause (1) is a straightforward conversion exercise, in part giving detailed effect to cl 2,
and in part restating existing estates in land in terms of interests. Under cl 5 all the
substantive law governing life and leasehold estates is applied to the corresponding
interests.
19
In England statutory determinable fees are apparently quite common where land comes into
the hands of a public authority for particular purposes, eg, a road.
40
41
Subclauses (2) and (3) are important to round off the scheme. If, for instance, the Crown
transfers land after the scheme is in operation other than by way of lease, the transferee
is to acquire allodial ownership. Moreover, it is not intended that those who will under
the scheme have allodial ownership should be able to "infeudate ", that is to create "estates"
in that land analogous to those that are now held from the Crown. In other words, the
abolition of freehold tenure and the conversion of estates to interests will have effect for
the future as well and will apply to citizens as well as to the Crown.
The scheme does not require, or envisage, that the term "leasehold" will fall into disuse.
"Leasehold" is a well-known and commonly used term which describes a lessee's interest
and land which is the subject of a lease.
42
4
Rules for special cases
(1)
For the purposes of the conversion to occur under clause 3, where before
the commencement of this scheme the holder of an estate in fee simple
(the grantor)
(a)
has granted a life estate with reversion to the grantor, the grantor
is deemed to be the holder of an estate in fee simple in the land,
subject to the life estate.
(b)
has granted a life estate to any person with remainder to any other
person, and at the commencement of the scheme the remainder
is vested, the person in whom the remainder is vested is deemed
to be the holder of an estate in fee simple in the land, subject to
the life estate.
(c)
has granted a life estate to any person with remainder to any other
person, and at the commencement of the scheme the remainder
is contingent, the grantor is deemed to be the holder of an estate
in fee simple in the land pending vesting of the remainder, subject
to the life estate.
(2)
These rules apply after the commencement of this scheme to the allodial
owner of land and to the grant of a life interest as they apply to the
holder of an estate in fee simple and to the grant of a life estate.
(3)
A lease may be granted after the commencement of this scheme for the
life of the lessee or of any other person, and shall create a leasehold
interest, subject to the terms and conditions of the lease, and not a life
interest.
(4)
Nothing in subclause (3) affects the validity and effect of any lease for
life granted before the commencement of this scheme.
43
COMMENTARY
Clause 4
This clause has the aim of clarifying the law in the special cases of life estates followed
by reversions or remainders, and of leases for life.
Example 1
A (a fee simple owner) transfers his land to B for life without doing more. In that
case A has what is technically called a reversion. The land goes to him or his
successors on B's death, and there seems little doubt that even during B's life A
retains a fee simple estate subject to B's life estate. So under the scheme A will
be the allodial owner.
Example 2
A transfers the land to B for life with remainder to C, who is alive at the date of
the transaction. In that case A has divested himself completely of his interest in the
land. C is said to have a vested remainder, and appears to be the fee simple
owner subject to A's life interest.
Example 3
The remainder is given to such of C's children as are living at B's death. These
children mayor may not have been born. Their remainder is contingent. It
appears that the grantor continues to own the fee simple in the meantime but this
is not certain (see discussion at para 91).
Example 4
Instead of transferring a life interest directly, A grants B a lease for B's life under
s 115 of the Land Transfer Act. On New Zealand authority (at para 91) B has not
a leasehold but a freehold interest for his or her life. The paper mentions some of
the practical uncertainties that this gives rise to.
Section 95 of the Land Transfer Act presents a further complication and may require
some amendment if legislation along the lines of the scheme is enacted. It reads:
(1)
The registered proprietor of land under this Act may create or execute
any powers of appointment, or limit any estates, whether by remainder
or in reversion or by way of executory limitation, and whether
contingent or otherwise, and for that purpose may modify or alter any
form of transfer hereby prescribed.
(2)
In case of the limitation of successive interests as aforesaid the
Registrar shall cancel the grant or certificate evidencing the title of the
transferor, and shall issue a certificate in the name of the person
entitled to the freehold estate in possession for such estate as he is
entitled to, and the persons successively entitled in reversion or
remainder or by way of executory limitation shall be entitled to be
registered by virtue of the limitations in their favour in that instrument
expressed, and each such person upon his estate becoming vested in
possession shall be entitled to a certificate of title for the same.
The problem is that where life estates followed by remainders or reversions are
created the District Land Registrar is required to cancel the fee simple title. New
titles are to be issued to those entitled to these subsequent interests only upon their
estate becoming vested in possession. This does not fit well with the concept of a
44
45
continuing allodial ownership to which a life interest and any other intermediate
interests are subordinate. Indeed it could be argued that the present law itself,
whereby the fee simple continues in existence in these circumstances, is not properly
reflected in s 95. (And except in respect of leases for life it is the intention of the
scheme to do no more than transpose existing rules to the new vocabulary of
ownership and interests, clarifying the law where necessary.)
The effect of subcl 3 is that for the future a lease for life will operate as a lease in
the same way as, for instance, a lease for 99 years now does. At present a lease
for life creates a freehold life estate.
Sublause (4) ensures that the status of existing leases for life will continue. They
amount to freehold life estates, which the scheme would convert into life interests.
The rights and obligations of these lessees (and their lessors) will therefore not
change.
46
S
6
Application of existing rules
(1)
All enactments and rules of law that apply to life estates and to leasehold
estates in any land (including estates by way of sublease), and to the
powers, rights and duties of life tenants, lessors and lessees, and
sublessors and sublessees, continue to apply to life interests and leasehold
and subleasehold interests respectively, and to the powers, rights and
duties of the owners of life and leasehold (including subleasehold)
interests under the scheme.
(2)
Nothing in this scheme alters or affects any remedies of any person in
relation to any land, or any interest in land.
Crown owns residual land
All land in New Zealand which is not held at the commencement of this scheme
by any other person in fee simple shall thereafter be owned allodially by the
Crown, subject to all then existing rights and encumbrances.
47
COMMENTARY
Clause 5
The purpose of this clause is to make it clear that the replacement of the term "estates" by
the term "interests" has no effect on substantive rights and remedies. Thus, for example,
the owner of a life interest will still be liable for waste to the extent that he or she now
is, and lessors and lessees will still have their existing rights of action for recovery of
possession.
Clause 6
It seems a basic principle - and it is certainly a requirement of convenience - that all land
should have an owner. The common law theory accommodated this by making the Crown
the ultimate owner of all land. The scheme instead makes the Crown the owner of all land
that no one else owns. As to Maori customary land see Part XII and comment on cl 2.
The need is to ensure that (a) all allodial land has an owner and (b) no land passes to the
Crown under the scheme by default - because, for example, there is no fee simple owner
presently in possession - while safeguarding existing substantive rights from change.
The broad words "in fee simple" are not limited and mean what they say. The fee simple
may be determinable (if there are determinable fees in New Zealand), or it may not be "in
possession" . It is still a fee simple to which the clause applies.
48
7
Crown may transfer land
The Crown shall not grant any estate in land after the commencement of this
scheme, but the Crown may, pursuant and subject to any enactment, transfer
its allodial ownership or grant a lesser interest in any land that it owns to any
other person in the same manner as that land or interest may be transferred
or granted by any person other than the Crown.
49
COMMENTARY
Clause 7
The concept of the Crown grant is rooted in tenure, and at least arguably impossible to
sustain in its absence. It is in the nature of a disposition (nowadays unconditional apart
from the payment of purchase price) by a superior of a part - never the whole - of the
superior's rights. So there seems no reason why the Crown grant should survive the
abolition of tenure. Such grants since 1885 have taken the form of the issue of a
certificate of title under the Land Transfer Act. Where the Crown does dispose of land
to private individuals under the necessary statutory authority the process is governed by
s 116 of the Land Act 1948. In essence, the person who purchases or acquires the fee
simple is, on completion of payment, entitled to a certificate of title in respect of the land.
According to s 116(7), the procedure set out in the section may be used in lieu of a Crown
grant.
But there is also s 12 of the Land Transfer Act 1952, which enables the Governor General,
by warrant under his or her hand, to direct the Registrar to issue a certificate of title in
Form No 1 in the First Schedule to the Land Transfer Act. However, new alienations by
the Crown in fee simple are now made under s 116, and a certificate is given by the
Commissioner of Crown Lands and the Chief Surveyor, which has the same effect as a
warrant under the hand of the Governor-General. (Hinde McMorland & SimLand Law,
Vol 1, para 2.024)
Under the scheme the Crown will not grant any estate in land but will transfer its
ownership, or grant some interest less than ownership (notably leases). Since the Crown's
ownership will be of the same nature as the citizen's, the normal modes of transfer should
be exclusive.
It is an administrative rather than a legal complication that Crown land generally (in
contrast to the situation in England) has never been "brought under" the land transfer
system and no certificate of title exists for it. Section 116 may need some adaptation for
the purposes of the scheme. Even now it seems inappropriate where a certificate of title
already exists for Crown owned land. However, it does not affect the nature of the
transaction - the Crown would simply be transferring its allodial ownership to the new
owner.
50
8
Crown may take land under statute
Nothing in this scheme limits or affects any right of the Crown to take or
acquire land pursuant to any enactment, but the Crown shall have no power,
except pursuant to an enactment or by agreement, to acquire any land or
interest in land. This shall not affect any right which the Crown has at law
to requisition land in time of war.
51
Clause 8
All legal systems recognise what is often called the right of eminent domain - the State's
right to take land from the citizen, even by compulsion, for public purposes seen as
sufficiently important and, where the rule of law prevails, subject to proper compensation.
This right is not dependant upon the doctrine of tenure and its retention is essential.
However, it is uncertain whether or not the Crown's prerogative right at common law to
take land in certain circumstances has been superseded by statutory provision - in particular
those in Part II of the Public Works Act 1981 and its predecessors. That Act empowers
the Crown (and local bodies) to acquire land by purchase or compulsion, and provides
procedures for doing so and machinery for determining objections. These processes,
which are aimed at protecting the rights of individuals, are not available if the Crown takes
land by prerogative power. Accordingly (though it is not an essential of the scheme) the
clause proposes to make it clear that there is no separate power to acquire land under the
royal prerogative except in time of war.
52
9
10
Escheat abolished
(1)
The rule of law known as the doctrine of escheat is abolished, but where
land would have reverted to the Crown by way of escheat, it vests in the
Crown as unowned land, subject to all other existing rights and
encumbrances.
(2)
Where under any enactment or rule of law a person
(a)
validly disclaims any land to which he or she is entitled as allodial
owner, that land vests in the Crown subject to all other existing
rights and encumbrances;
(b)
validly disclaims any life interest, that interest reverts to the
allodial owner subject to all other existing rights and
encumbrances;
(c)
validly disclaims any lease or sublease, the lease or sublease
reverts to the lessor, or, as the case may be, to the lessee subject
to all other existing rights and encumbrances.
Co-ownership
Land, and any interest in land, may be owned jointly or in common, and every
enactment and rule of law which relates to joint tenants and tenants in common
shall relate according to its tenor to joint and common owners.
53
COMMENTARY
Clause 9
The Administration Amendment Act 1944 abolished "escheat for want of heirs or
successors", but Re van Enckevort (a bankrupt) (1990) 1 NZ Conv C 190,589 and Re
David James & Co Ltd (in Liquidation) [1991] 1 NZLR 219 show that the doctrine remains
in at least two residual cases. Subclause (1) replaces escheat in all cases with a statutory
vesting in the Crown.
l(~
J.
Subclause (2) deals particularly with disclaimed land, which was the subject matter of the
two above decisions. It may exhaust the remaining possibilities of land escheating but
subcl ( 1) would in any event remove any doubt. Subcl (2) is not limited to allodial
ownership. It would seem that upon disclaimer a life interest would revert to the allodial
owner, and a lease would revert to the lessor. It is useful to say this expressly, and paras
(b) and (c) do so.
Clause 10
This is a straightforward adaptation of terminology to accord with the scheme.
D_Pr·
54
11
Land transferable
Subject to any enactment, land, and every interest in land, is transferable
without the pennission of the Crown or the need to make any payment to the
Crown.
12
Future interests may be created
Land may be transferred, and any interest in land may be created or
transferred, to take effect at any future date, or upon the occurrence of any
future event, within the limits of the rule against perpetuities as modified by
the Perpetuities Act 1964.
55
COl\1MENTARY
Clause 11
This is based on the Law Commission's proposals for the replacement of the statute Quia
Emptores. (NZLC PP16 para 131) The reference to permission of and payment to the
Crown is perhaps unnecessary. The need to negative any requirement of Crown permission
for transfer of an estate, or of payment to the Crown, arose from the original feudal
ambience of the law, and the fact that land was held in fee from the Crown. If land is
allodially owned, all this is irrelevant.
Clause 12
This also follows the Law Commission's proposals for a new Property Law Act, which
can be found in NZLC PP 16, para 157.
56
13
Equitable rights unaffected
Nothing in this scheme affects any power of a court exercising equitable
jurisdiction to enforce rights and interests in land, or give any remedies for the
infringement of such rights and interests, except so far as may be required to
give effect to the provisions of this scheme.
14
Land Transfer Act unaffected
Nothing in this scheme limits or affects the provisions of the Land Transfer Act
1952, except as specifically provided.
57
COMMENTARY
Clause 13
It is not the purpose of the scheme to affect equitable rights and interests or to diminish
any powers of a court exercising equitable jurisdiction. But "equity follows the law" and
the terminology at least will have to alter. To the extent that tenure and legal estates
disappear it would be confusing and anomalous for them to remain in equity. The courts
are well able to deal with this appropriately, particularly given the general indication in
this clause.
The language of the clause is based on a concept of equity as a system of remedies and
of enforcing certain interests, rather than as a body of substantive law.
Clause 14
It will be necessary to make allowance for the scheme in specific provisions. However,
they have yet to be identified. The definition of "land", and s 95, may be two of them.
At least certificates of title issued subsequently must reflect the new terminology. And it
will need to be made clear that certificates of title may continue to be issued for lesser
interests than full ownership, eg life interests, leasehold interests, and ownership in
common.
58
15
Maori customary land unaffected
Nothing in this scheme applies to or affects Maori customary land except
insofar as the scheme expressly so provides.
16
Repeals
[The scope of these will depend on what changes have been made to the
Property Law Act consequent on the Law Commission's Preliminary Paper 16.]
17
Consequential amendments
Acts likely to require amendment include
Crown Grants Act
Joint Family Homes Act
Land Act
Land Transfer Act
Maori Affairs Act
Property Law Act
Unit Titles Act
59
COMMENTARY
Clause 15
This clause can stand whatever is decided about the status of Maori customary land: see
Part XII. Various amendments will be needed to the Maori Affairs Act 1953, the exact
nature of which will depend on that decision. But, for example, if the Maori Land Court
determines the title to any customary land, and a land transfer title is issued, it will not be
held as an estate but owned as allodial land. Moreover, "Maori land" now held by way
of a freehold estate in fee simple will, like other land, become allodial land owned by the
present proprietors of the estate.
In any event the scheme will otherwise preserve Maori land as a separate category with
its own body of law.
Clause 17
A few of the possible changes have been indicated in the comments above and in the main
paper.
60
APPENDIXB
GLOSSARY
Some of the terms used in the paper are defined below. The terms derive from the law
of England. Their relevance to the law of New Zealand stems from the introduction of
the English system of land tenure (or means by which land is held) when New Zealand
became a British colony. However, the system of land tenure in New Zealand was an
adaptation of the English law. The terms have therefore been defined in terms of their
relevance to New Zealand law.
The glossary is prefaced by three classifications which explain how the terms are ordered
in the dictionary.
A. The English feudal structure
Land ownership conferred status in the feudal system.
•
All land was owned by the Crown (the overlord, the lord paramount)
•
The Crown granted land to its tenants in chief
•
The tenant in chief granted land to subsequent tenants who could in turn
effect subsequent grants, with the last in line of the subsequent tenants
being known as the tenant in demesne.
•
Each of the tenants in possession between the tenant in chief and the tenant
in demesne were known as mesne lords.
B. Doctrine of tenure
The two important types of tenure recognised at law were:
Free tenures; and
Unfree tenures
There were different types of free tenures. They were the tenure in chivalry, the tenure
in socage, and the spiritual tenure. The tenure in chivalry was subject to "incidents",
conditions or obligations with which the tenant had to comply. The incidents were military
service, aids, homage, escheat, wardship and marriage, forfeiture, relief, and primer seisin.
The tenure in socage was subject to all the incidents of the tenure in chivalry except
homage, military service and wardship and marriage.
The major unfree tenure was villeinage, which later became known as copyhold.
C. Doctrine of estates
The different categories. of estate represented the different periods for which land might
be held. The two types of estate were "freehold" and "leasehold". Each type of estate
consisted of sub-categories.
62
Freehold estates:
fee simple
fee tail
life estate (including a life estate pur autre vie)
Leasehold estates:
fixed term of duration
term with duration capable of being rendered certain
The terms defined below are ordered, first, with reference to the doctrine of tenure, and
second, with reference to the doctrine of estates.
doctrine of tenure
copyhold
one of the unfree tenures was villeinage, which later became known
as copyhold. This unfree tenure, the tenure of common labourers,
saw the tenant in possession on behalf of the mesne lord, and obliged
to perform certain services for the mesne lord. The term "copyhold"
derived from the peculiar way in which the land was transferred. It
was abolished in England in 1926 and has never existed in New
Zealand.
escheat
A doctrine of law under which a fee simple estate in land reverted to
the Crown (or in feudal times the mesne lord) if the person holding
the estate died without heirs. Escheat for want of heirs and
successors was abolished in New Zealand in 1944. Nonetheless,
where a person dies intestate and without any successors as defined
in the Administration Act 1969, his or her land and other property
goes to the Crown as bona vacantia (unowned goods). And the court
has decided (Re van Enckevort (1990) 1 NZ Conv C 190,589) that a
form of escheat still exists when the Official Assignee disclaims
certain property on bankruptcy.
freehold
the term came to be used in substitution for socage, when used in the
sense of classification of tenure; however the term can also be used
to describe the nature of an estate, and it is in this sense that it is
most frequently used in current New Zealand law. The term is now
used interchangeably with the term "fee simple", although in popular
usage it can have a different and legally inaccurate meaning: land that
is not subject to any mortgage.
socage
The tenure in socage is, according to Megarry and Wade (at 18),
defined by what it is not, rather than what it is. The services
incidental to socage tenure (which had been generally some
agricultural service fixed both as to nature and amount) had by the
end of the 15th century been commuted for money payments, which
were often described as quit rents. The name by which socage tenure
is usually now known is freehold tenure - the only surviving category
of tenure (other than leasehold) in both England and New Zealand.
63
doctrine of estates
estate
the word derives from the word status. It refers to the period of time
for which land could be held, whatever the tenure. The difference in
the way the estate is described refers to the different period of time
for which the estate is held.
life estate
the term of the estate was the life of either the tenant or some other
person named by the grantor. Section 95 of the Land Transfer Act
governs creation of a life estate by transfer. A new certificate of title
issues for the life estate so created.
fee simple
originally the estate which endured for so long as the original tenant
or any of the heirs of the original tenant survived. However, the
tenant could alienate the land and the fee simple survived while the
new tenant had heirs, thereby making the estate potentially perpetual.
Under Part III of the Administration Act 1969, an estate in fee simple
lasts until the owner of the estate dies intestate without successors.
(Hinde, McMorland and Sim, Vol 1, para 1.029)
fee tail
the estate lasted for the time during which either the original tenant
or any of the lineal descendants of the original tenant survived.
Section 16 of the Property Law Act 1952 has abolished the estate in
fee tail in New Zealand.
seisin
the term denotes a particular kind of "quiet possession of land" and
is one of the features distinguishing freehold estates from leasehold
estates, because seisin applied only in respect of freehold estates. The
term reflected the historical differences between the two main types
of tenure and estates. A person was seised of land if he or she held
a freehold estate in land of freehold tenure, and either had physical
possession of the land or had created a leasehold or copyhold estate.
Some one always had to be seised of particular land. The term is no
longer relevant because the distinctions which gave it its peculiar
meaning no longer exist.
other terms
bookland
An Anglo-Saxon term denoting land which was the subject of gift by
book or charter, and governed by the notion not of dominium and
tenure but of property. Bookland was, however, under protectionnotably, of the king, but also of others including the church - and a
holder of land by book could nullify challenge to the rights in the land
by simple production of the charter. The other, more common, form
of property at this stage of English law was folkland, which was of
similar, absolute status but by contrast vulnerable to conflicting
claims. (Joliffe, 72-74)
customary
title
also described as aboriginal or indigenous title. A form of burden
upon the legal title to land, but binding all land ownership ab initio.
The concept has not yet been defmed by the courts in order to
identify the consequences (if any) for successors in title to the Crown.
hereditament
inheritable rights in real property, as opposed to inheritable rights in
personal property.
64
corporeal
hereditament
the physical objects comprising real property, ie land, including
buildings and other fixtures, over which ownership is exercised. But
an estate in land is a corporeal hereditament although it is an
abstraction.
incorporeal
hereditament
rights in relation to real property, rather than things, eg, easements,
profits and rentcharges. The rights which are classified as incorporeal
hereditaments are not logically identifiable but are the consequence of
historical developments. Rent charges are incorporeal hereditaments,
as are easements and profits.
personal
property
all forms of property other than land.
real property
land and the things that are attached to land, rights in land which are
heritable or enduring for life. A lease is not real property, however,
being an exception because of the way in which the form developed
outside the feudal system of landholding by tenure. A lease is a
hybrid: a chattel real.
Udal law
the system of law which has prevailed in Orkney and Shetland since
the 9th century. Ownership of land was comprised in a hereditary
estate held absolutely but requiring a payment.
usufruct
the term derives from Roman law, and refers to the right to use the
property of another. A usufructuary would, during possession, be
obliged to perform the obligations of ownership, by, for example,
paying outgoings.
65
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66
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67
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NZLC R2
NZLCR3
NZLC R4
NZLC R5
NZLC R6
NZLCR7
NZLCR8
NZLC R9
NZLC RIO
NZLC Rll
NZLC R12
NZLC R13
NZLC R14
NZLC R15
NZLC R16
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NZLC R18
NZLC
NZLC
NZLC
NZLC
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R21
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Limitation Defences in Civil Proceedings (1988)
The Structure of the Courts (1989)
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Legislation and its Interpretation: Statutory Publications Bill (1989)
First Report on Emergencies: Use of the Armed Forces (1990)
Intellectual Property: The Context for Reform (1990)
Criminal Procedure: Part One: Disclosure and Committal (1990)
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Company Law Reform: Transition and Revision (1990)
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NZLC
NZLC
NZLC
NZLC
NZLC
PP2
PP3
PP4
PPS
PP6
NZLC PP7
NZLC Ppg
NZLC PP9
NZLC
NZLC
NZLC
NZLC
NZLC
NZLC
NZLC
NZLC
PPI0
PPll
PP12
PP13
PP14
PP15
PP16
PP17
NZLC PP18
NZLC PP19
Legislation and its Interpretation: The Acts Interpretation Act 1924 and Related
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The Accident Compensation Scheme (discussion paper) (1987)
The Limitation Act 1950 (discussion paper) (1987)
The Structure of the Courts (discussion paper) (1987)
Company Law (discussion paper) (1987)
Reform of Personal Property Security Law (report by Prof J H Farrar and M A
O'Regan) (1988)
Arbitration (discussion paper) (1988)
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